up and down, up and down, repeat

wealthstreaming, or snowflaking for income

When my post on wealth ideas lost to I’ve Paid For This Twice Already in FMF’s March Madness Tournament, I started thinking about snowflaking. Snowflaking is a spinoff of the “snowball” debt elimination concept invented by Dave Ramsey but the snowflaking version of this concept has really been popularized by Paid Twice. In a nutshell, it’s making every attempt to generate income, however small, to apply to your consumer debt. The idea is that even tiny payments on principal make a disproportionate difference to the overall total amount paid when you consider interest.

But since I have no non-mortgage debt, and my mortgage is at a very low rate of interest, I’m not focused on debt repayment. Yet the concept can be tweaked and twisted and all of the sudden it makes great sense in my life and for my (multi-)million dollar journey. I’ll call this concept, for lack of a better word, wealthstreaming. And yes, I know it doesn’t make much sense, but I like the way it sounds.

I had one big stream of income until recently – my consulting work. I have other streams, too – interest, dividends, some web-based income, some (very minor) income from miscellaneous sources like commissions for landing new business. I like to think of all of these as faucets pouring into the same sink – the water’s coming through different sources but ending up going through the same drain (my family’s expenses) and the goal is to make the water pour through in such quantities that the drain can’t process it all and the sink overflows. Neat, huh?

So until recently the consulting income was a heavy stream. Now that I’m problogging for a while, that stream will trickle off (residual income comes in after the work’s completed). Some other income will hopefully pick up a bit – web-based income, referral income (bonuses from new work or recruiting other consultants) and even some other side businesses that I might work on (an e-book is in the works)! I have been doing quite a bit of studying of the coaching profession as well. My goal is to have the streams get heavier and heavier until they match the force of the consulting income stream, because then I can turn that faucet off, and not just for a trial run – for good.

The beauty of some of the streams is that I tapped someone else’s water line. Those dividends? No more work goes into generating those. I made the money, invested it, and now those companies just give me a check once a quarter. I like those streams. A lot. In fact, I want as many of those streams as possible.

Other faucets need to be kept open by my effort. The web income won’t flow unless I keep working on it. Referrals take a lot of work. Those streams are nice; not as nice as the streams from someone else’s line, but more fun and easier to generate than the one-hour-of-work-for-one-hour-of-pay consulting stream.

I try to learn new skills so I can widen the faucets or clean them up – or best of all, I can add another faucet to the sink. I’m picking up web design, slowly – hey, there’s a potential future stream! I am learning about investing in non-stock-market investments – ah, maybe rental income in the future? It’s hard work to develop the skills to add new faucets, but if you have 50 faucets all giving you a trickle it’s easier to maintain than one overstressed faucet creating a bottleneck because there are only so many hours in a day.

So that’s my idea – wealthstreaming, for lack of a better moniker. Adding tiny stream of income after tiny stream and seeing which one flows fastest. Not just concentrating on the big streams, but looking for the little streams that take no effort to maintain. What’s nice about the idea is that since I don’t have a grand idea – I’m still brainstorming the next Facebook or the next Digg – I can work on increasing my income today and not worrying about hitting a million dollar jackpot. I’ll just keep opening faucets until the sink spills over and I have more water than I need – because then I can share the water with my extended family, my friends and others.

In a somewhat related vein, my husband and I, who never did anything entrepreneurial or outside the usual 9 to 5, did plan ahead in this respect: he retired from a public sector job (university teaching) with 30 years of service, so he’s already getting a nice income stream. At 62, we will both start drawing Social Security. At 60, I will start drawing a retirement income from a public sector job (public school teaching) with 15 years of service. Right now I’m getting ready to start my 4th year on another public sector job in another state and (again, teaching) plan to work a few more years at that (I’m vested after 5 years). I have a 403B, we both have IRAs, and we have regular stock dividends. If I can count correctly (and at the end of a long day in an elementary school, that’s not always a sure thing!!!), we will have 9 income streams. I know that working at a lower salary in the public sector isn’t that glamorous, but we are looking at a pretty secure retirement. Consider teaching! Do a little good for your corner of the world, and look forward to a defined benefit retirement!

Love it! I love the idea of lots of little streams, but I’m a born multitasker. 🙂 While growing wealth is not my focus right now (I’m working on filling in the gaps in my resume), it’s definitely something I’ll be looking into in a few years.

I like the phrase. So snowflaking and wealthstreaming. The advantage of the former is that it can be applied to anything you’re trying to build up. But the latter works quite well in this particular instance.

Oh how I love when those not in debt realize that snowflaking can apply to them too. Yay! 🙂

I likey the wealthstreaming. I wrote about snowflaking my income a few days ago on the revolurion site, but I didn’t have a catchy name for it or be so thorough. Great post! I have much random income…. no big faucet though 🙂

Earnings/schmearnings … as long as you’re making money 🙂 I want to think of using your ‘weatherstreaming’ concept to help evaluate whether an Opportunity is Worth Pursuing … I’ll let you know if I come up with anything, but you just might have something here!

@Pat: While I’m sure the concept even predates Dacyczyn, I think Ramsey coined the actual “snowball” term. I haven’t read either of their books, and I’m relying on other sources (internet, other blogs, etc.) so I could certainly be wrong, but what I know seems to indicate that Ramsey came up with the term.

I’m sure even wealthstreaming isn’t an “original” term by a long shot!

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